Verizon to Ditch 2100 Employees after Merger with Yahoo Gets Shareholders’ Nod

Yahoo will no more be a standalone company as its core assets are being bought by Verizon. The $4.48 billion acquisition of the core assets of Yahoo will close next week. This move will cut more than 2100 jobs from AOL unit and Yahoo unit. Duplicated positions will likely be affected due to this move but engineering jobs will remain intact. 15 percent staff of both the units, which employ more than 14,000 workers, will be affected by this move.  Sources suggest that most job cuts will be experienced in California while the rest will be from abroad.

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Yahoo’s Core Asset Sales

 

Shareholders approved the sale of the company’s assets on Thursday. The results are expected to close in on Tuesday but the preliminary results show a consensus has been reached. Verizon is the no. 1 wireless operator in the US. It is buying the core assets of Yahoo to integrate email, search, and messenger services. These three services will combine with AOL unit and advertising technology tools. Verizon bought AOL for $4.4 billion two years ago in a bid to make better integrated services.

Once valued at more than $100 billion, the search giant Yahoo is still one of the largest internet properties. It has millions of customers who use Yahoo emails, Yahoo finance, and Yahoo sports. In fact, the home page is still heavily trafficked. Despite all this, Yahoo slashed 15 percent of its workforce in February 2016. Yahoo and Verizon wanted to close this deal earlier. However, after two data breaches the deal was delayed.

Verizon’s Savior

 

Verizon is expecting mobile advertising and mobile video business to boom. It may not have many chances to create a footprint in a new industry. Its shares have been going down, trading 15 percent lower this year. The company’s chance to grow in a mature wireless market is very slim. Hence, looking for alternative businesses could be a good option.

Verizon will rebrand Yahoo and AOL as Oath. The new division will be led by Tim Armstrong, the CEO of AOL. Yahoo gets 200 million monthly unique visitors on its site while AOL receives 150 million monthly unique visits. Verizon wants to use this data to serve advertisements to users. Note that Verizon already has a 100 million strong customer base.

Yahoo’s CEO Marissa Meyer lost the confidence of investors like Starboard Value LP. After the sale closes, Mayer may not remain.

 

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Anthony Young